According to a recent survey of municipal councils, English councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in England stated that 60% of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for selling public land and land to shore up their finances, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
This coalition said that a significant number of authorities seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would prioritise service redesigns and utilising financial reserves to weather growing financial challenges.”
Detailed Cases of Planned Sales
Medway Council in southeast England said its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the plan.
Council Tax Rises and Wider Fiscal Strains
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase council taxes next April to cover the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but certain measures take time to achieve both improved services and cost efficiency,” said a council leader.
He added: “We face demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Projections
A survey of regional authorities this week further found council budgets being strained by the growing number of children and older individuals needing Send support.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Funding Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, many participating urban areas were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The figures highlights the extent of difficulties facing municipal officials across key cities in the next twelve months,” the report concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the real levels of deprivation and need,” said a council leader.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the survey revealed.
